Trump's fresh tariff threats knock Europe stocks to weekly loss in last-minute slide

By Amir Orusov and Pranav Kashyap

Oct 10 (Reuters) - European shares tanked on Friday, erasing weekly gains in a last-minute slide as renewed trade war fears sparked by fresh threats from U.S. President Donald Trump rattled investors' nerves, with their focus also on France.

The benchmark STOXX 600 .STOXX closed 1.2% lower in its worst intraday drop in over a month.

Trump threatened a "massive increase" in tariffs on imports from China. All major regional bourses except Britain's .FTSE and Spain's .IBEX fell over 1%.

"The president's comments are not, obviously, helpful for the market," said Steve Sosnick, chief market analyst at Interactive Brokers.

"We finally got through the worst of the tariff concerns, and now we find ourselves once again faced with another round of them, and the tone of his comments was certainly quite aggressive."

AUTO STOCKS LEAD WAY DOWN

Europe's auto stocks .SXAP skidded into the weekend, with the sector down over 9% for the week, making it the worst performer. Steep losses in Ferrari RACE.MI and BMW BMWG.DE weighed heavily. Utilities .SX6P, often seen as bond proxies, emerged as the week's top gainer.

Investors also focused on France, where President Emmanuel Macron scrambled to name a new prime minister before a self-imposed deadline, amid warnings from the central bank that political gridlock is beginning to bite into growth.

French blue chips .FCHI dropped 2% this week as markets were rocked on Monday after Sebastien Lecornu, France's fifth prime minister in two years, tendered his and his government's resignation just hours after announcing the cabinet line-up.

Earlier in the week, the STOXX 600 had scaled record highs, buoyed by hopes of looser U.S. monetary policy and relentless AI-driven optimism. But those gains unraveled as political jitters in France and Japan, coupled with a U.S. government shutdown, sent investors to safe havens.

On the day, almost all sectors fell across the board, with technology .SX8P and luxury stocks .STXLUXP at the forefront of the selloff.

Energy stocks .SXEP were also knocked lower. Oil prices declined to multi-month lows as the market's risk premium faded after Israel and Hamas agreed to the first phase of a plan to end the war in Gaza. O/R

Real estate .SX86P climbed 0.2%, snapping a four-day losing streak, while food & beverages .SX3P rose 0.3%, extending gains to a fourth straight session.

Basic resources .SXPP fell 2.5%, with ArcelorMittal MT.AS down 5.8% after Goldman Sachs downgraded its rating on the steelmaker to "neutral" from "buy."

Among other movers, Germany's Energiekontor EKTG.DE dropped 19.4% after the wind and solar park developer cut its 2025 earnings forecast.

Jyske Bank JYSK.CO gained 3.6% after the Danish lender hiked its full-year guidance.